Stalemate: Kerala rejects Rs 5000 crore central govt proposal, wants Rs 10000 crore immediately

NEW DELHI: Kerala on Wednesday rejected the central government’s proposal of Rs 5000 crore help to come out from the scare of a crippling economy. The central government decided to allow Rs 5000 crore to Kerala after the Supreme Court beseeched Delhi to provide help, to save the state from further financial crisis. Rs 5,000 crores will be given by the Center and it will be reduced in the next year's limit.

However, Kerala demanded Rs 10,000 crore assistance on an immediate basis from the centre and rejected the proposal of Rs 5000 crore. Kerala also pointed out that the Centre's position is infringing on the rights of the state. Even the Supreme Court persuaded Kerala to take the money rather than endure a worse financial crisis in the coming days.

With this, Kerala demanded a detailed hearing on the matter. The centre also took the same stand. The Supreme Court has announced that the hearing will be held at 10:30 on the 21st. An interim order is expected to be passed on the same day to resolve the current issue. Kerala had earlier approached the Supreme Court with the request to release the claimed central funds.

On Tuesday, the Supreme Court demanded that the central government grant a one-time rescue package to a financially struggling Kerala. It was also suggested to consider the loan demand as a special case. A bench comprising justices Suryakant and KV Viswanathan gave a favourable recommendation to the state on Wednesday morning after Kapil Sibal, representing Kerala informed the court about the central government denying the right of the state to demand higher loans.

On Tuesday, the court also asked the central government to adopt a lenient approach towards Kerala. SC asked the central government to allow additional relaxation within 10 days. The court then asked the central government to impose strict conditions on loans during the first quarter of the next financial year.

‘We can pay Rs 5000 crore by April 1. This should not be considered as a special case since many other states have also been denied the right to borrow.” The Additional Solicitor General also clarified that Kerala is asking for 15 times more than its expense.